This report represents the 2006 edition of the UK Competitiveness Index, which was first introduced and published in April 2000. For the first time, this year it is produced in conjunction with the Work Foundation. It represents the most up-to-date, thorough and authoritative benchmarking of the competitiveness of the UK?s regions and localities, as well as setting UK competitiveness within an international context.
The UK Competitiveness Index has been designed as an integrated measure of competitiveness focusing on both the development and sustainability of businesses and the economic welfare of individuals. In this report, we publish indices for 2006 (incorporating the most up-to-date data available), as well as those presented in the 2005 report as a means of comparison and examining the UK?s changing competitiveness landscape.
Due to space constraints it has proved impossible to list in full all the regional and local indicators prepared within the report. Therefore, a spreadsheet of the complete datasets is available in conjunction with this report for those interested in obtaining more detailed benchmarking or carrying out further analysis of their own.
The UK Regional Competitiveness Index is analysed in chapter 2 of the report, which also contains a range of other pertinent indicators. These indicators relate to headline economic performance, the knowledge economy, the enterprise economy, trade competitiveness, education and the skills economy. Chapter 3 focuses on the role of venture capital to regional competitiveness and provides an analysis of relevant data and indicators.
The UK Local Competitiveness Index benchmarks the 433 local authority and district areas constituting the UK. Chapter 4 highlights the most and least competitive localities in the UK, as well as looking at those that have seen the biggest improvement or decline in their competitiveness since the 2005 report. Chapter 5 presents some conclusions on the findings, while further methodological details relating to the UK Competitiveness Index are contained in the appendix.
Executive Summary
- The 2006 UK Competitiveness Index indicates that the substantial financial and institutional investment in regional policy over the past five years is starting to pay off.
- One important conclusion is that successful regional industrial policies require long-term commitments and patience before they can be judged as successful or not.
- The economic divide between Southern England (London, the South East and Eastern England) and the less competitive regions is starting to close. The North East, Wales, Northern Ireland, Scotland and Yorkshire and Humberside all saw significant improvements in competitiveness compared with the UK average.
- The key driver behind these relative improvements has been more through better labour market performance than improved productivity. Nonetheless, some of the least competitive regions such as the North East are also showing significant improvements in both innovative capacity and improved innovation performance.
- Public backed venture capital funds have demonstrated their value by providing the majority of venture capital investment in the less competitive regions. A key test in the future will be whether this ?pump priming? role stimulates greater provision by the private sector.
- At the local level the competitiveness index suggests some convergence and the possibility of an improvement in intra-regional disparities in competitiveness, with some of the worst performing localities improving against the UK average.
- However, there is still much to be done. Significant regional differences in economic performance remain.
- Moreover, policies appear to have had little impact on some persistent weaknesses such as regional differences in enterprise development.
- Indicators such as business start up rates, self-employment rates, business density rates and business survival rates show no significant improvement in recent years.
- In addition, there are some potentially worrying underlying trends. There has been a decline in the share of businesses that fall within the international definitions of private sector knowledge based industries, especially in non-metropolitan Southern England. As the figures relate to 2004, this may reflect the after-shocks of the collapse in the dot.com boom and the difficulties faced by some high tech manufacturing industries in global markets. In future reports we will be looking at the spatial dimension of the knowledge economy and the implications for regional and local development in more detail.
UK Competitiveness Index 2006: The Datasets
The following datasets are available to purchase in Excel spreadsheet format:
Regional Datasets (covering all 12 UK regions)
- R&D Exp (as % of GDP) Business enterprise sector 2003
- R&D Exp (as % of GDP) Business enterprise sector 2002
- R&D Exp (as % of GDP) Government sector 2003
- R&D Exp (as % of GDP) Government sector 2002
- R&D Exp (as % of GDP) HE sector 2003
- R&D Exp (as % of GDP) HE sector 2002
- (GVA) per head at current basic prices 2004
- (GVA) per head at current basic prices 2003
- Economic Activity Rate 2005
- Economic Activity Rate 2003
- Business Start-Up Rate per 1,000 Inhabitants 2004
- Business Start-Up Rate per 1,000 Inhabitants 2003
- Businesses per 1,000 Inhabitants 2004
- Businesses per 1,000 Inhabitants 2003
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